For some reason Skyrim only says "Can't sleep/wait in this location" no matter where I try to wait or sleep. There are no answers anywhere else, and this isn't caused by any quest or location as I have tried everything. I have no saves before this and my character is level 20 so starting it over would be a pain.
I own Skyrim on the PC.

I had the same problem, except for the fact that I was in the middle of the final chapter of the dark brotherhood's quests and a guard could appear more or less at any place, and any time and ruin my sneaking progress.

Anyway, whenever I tried to sleep, a guard would appear somewhere close by. Have you been scouting around after you receive the message? Perhaps they won't appear if you are in the middle of a dungeon.

The only way I could solve it was by getting arrested and paying my bounty, then going back to the same place (dropping all my stolen goods beforehand of course).

Late answer, but I had the exact same prolem: it simply told me "you cannot wait/sleep at this location.
The thing that fixed it for me was that I simply transformed into a vampire lord* (from Dawnguard DLC) and then transfored back. Miraculously it all worked after that. I hope this helps.

*If you dont have Dawnguard I'd imagine a werewolf transformation would also work.

There is a bug in 1.1 of Skyrim that prevents someone (in certain circumstances) to not be able to press "enter" when trying to Wait or Sleep. I can't upgrade to 1.2 yet I spent hours trying everything and finally found the answer:

If you press and hold the icon that allows you to move the slider left and right and then press "E" AGAIN. It will cause the intended effect.

Wait: Press E, click and hold the slider at the time you wish and (while still holding the slider) press E again, and wait that amount of time.